State of the Union 2013: Heritage Experts’ Analysis

During his speech tonight, President Obama, in a brief passage, pledged to provide the military with new capabilities. This pledge was brief because it included no specifics about the kinds of new capabilities he has in mind. This is not surprising for two reasons.

The first reason can be found in another topic of his speech, which was his touting of his achievement in withdrawing the U.S. military from Iraq and his commitment to withdrawing the military from Afghanistan. Clearly, President Obama is more interested in retrenching the military than building up its capabilities.

The second reason is the high priority President Obama has established for reducing the defense budget. Under his current budget proposal, provided about a year ago and that does not account for the looming impact of sequestration, the overall defense budget for the next fiscal year (2014) will be some 20 percent lower than what it was in 2010. The fact is that his defense budget will not provide enough funding for the research and development and procurement programs necessary to provide the military more advanced capabilities.

— Baker Spring

Iran Nuclear Issue Glossed Over

President Obama devoted only two sentences to Iran’s nuclear challenge, perhaps the most urgent national security issue in 2013. He said that “the leaders of Iran must recognize that now is the time for a diplomatic solution, because a coalition stands united in demanding that they meet their obligations. And we will do what is necessary to prevent them from getting a nuclear weapon.”

But Tehran remains defiant and is unlikely to make concessions merely because “a coalition remains united.” That did not stop North Korea from gaining a nuclear weapon, and Iran is a much bigger and stronger country.

Moreover, the president’s pledge that “we will do whatever is necessary to prevent them” is severely undermined by his nomination of former Senator Chuck Hagel as Secretary of Defense. Hagel not only has opposed sanctions on Iran, but he has repeatedly warned against using the military option against Iran. That greatly reduces U.S. leverage in negotiating with Iran and greatly increases the chances that Israel will go it alone to prevent a nuclear Iran.

Tonight, President Obama praised the reauthorization of the Violence Against Women Act (VAWA) in the Senate today. While protecting victims of domestic violence is a worthwhile goal, the Senate bill contains provisions that continue a worrying trend of federal micromanagement of higher education. Specifically, the bill requires all colleges receiving federal funds to allow accusers in campus sexual assault cases to appeal acquittals. Allowing multiple opportunities to convict a student of sexual assault seems fundamentally unfair, raising serious due process and double jeopardy concerns that I have outlined elsewhere. Even absent such concerns, the disciplinary proceedings of a local college is not something that the federal government should be dictating—especially absent a constitutional reason for the feds to get involved. In another provision, VAWA authorizes the Secretary of Education to develop “best practices” relating to campus safety and emergencies. Preventing sexual assault on American campuses is laudable. However, suggested “best practices” developed by the U.S. Department of Education have a funny way of developing into binding legal standards on private and state colleges. Should the House of Representatives choose to reauthorize VAWA, such controversial and unnecessary provisions should be cut before final passage.

— Andrew Kloster

Responding to Newtown

All Americans, no matter what our backgrounds or political perspectives, abhor the death of innocent human beings. We were shocked by the killings in Newtown and other recent mass shootings, and grieve with those who joined the First Lady at the State of the Union.

As we try to make society safer and stronger, constitutional and complex cultural factors must be taken into consideration. As we explain in a recent Heritage paper, policymakers should avoid a rush to judgment on prescriptions that violate first principles, ignore the real root of these complex problems, or disregard careful social science research. The most important solutions lie at the state and local levels, in the community and within the family.

The Second Amendment is an important safeguard of Americans’ security. Gun laws must be constitutional and should reflect the research on their effectiveness in preserving law and order. As to the President’s emphasis on background checks: The only way to enforce universal background checks for private sales is if law enforcement authorities know what firearms are held by private citizens. And the only way to know what firearms are held by private citizens is through the creation of a national firearms registry. Federal law currently prohibits authorities from using data in the background check system to create a national firearms registry, although there are avid gun control proponents who would like to change that–a real threat to the Second Amendment rights of legitimate gun owners.

— John Malcolm and Jennifer Marshall

Protecting America Requires Actions, Not Just Words

President Obama pointed to missile defense as tool for combating the spread of nuclear and other very destructive weapons in his speech tonight. That is all to the good, because ballistic missiles are increasingly becoming the delivery system of choice for these weapons. A good word, however, does not a good policy make when that word is contradicted by actions.

Accordingly, the American people will be well advised to review the President’s record during his first term. It includes the following:

Cutting the missile defense budget he inherited from the Bush Administration;

Curtailing and cancelling a number of missile defense programs, including the Ground-based Midcourse Defense system, for defending U.S. territory against missile attack;

Subordinating the missile defense program to his nuclear disarmament and arms control agenda and his “reset” policy toward Russia; and

Depending on Congress to add funding to the U.S.-Israel missile defense cooperation program.

Before President Obama earns the trust of the American people on the issue of missile defense, he will need act differently than he did in his first term. He can do much better.

— Baker Spring

The Renewed Threat of Terrorism

The president’s statement that this nation “salutes those who defend it around the world” unfortunately rings hollow – when the administration’s treatment of the Benghazi terrorist attack is considered. Anyone with a sense of irony would not have put such a line in the speech. And, even though the administration has thumped its chest over the killing of Osama bin laden, al-Qaeda and its affiliates are growing in North Africa in places like Libya and Mali. Only a week ago, the U.S. embassy in Turkey was the target of a terrorist attack. And we are still sorting through the messy aftermath of the terrorist attack on the U.S. consulate in Benghazi, which Obama has tried to move beyond.

Until this White House is willing to account for its actions and false storylines peddled following the Benghazi attack, its credibility on the issue of terrorism will continue to be severely compromised. With a president who failed miserably to show responsibility for Americans under attack, this country will continue to face grave dangers ahead.

— Helle C. Dale

The Americas Largely Passed Over

Part lecture, part pep rally, part sermon, President Obama’s state of the union touched on many themes: the renaissance of American manufacturing, the creation of centers for innovation excellence, and abundant American energy. He urged the making of a “smarter America.” The President stressed issues of interest to our hemispheric neighbors such as climate change, comprehensive immigration reform, curbing gun violence, and raising the minimum wage, which will impact recent immigrants, many of them Hispanic. In short, Americans of a certain age had a déjà vu feeling of a return to Lyndon B. Johnson’s “Great Society.” The President promised to complete negotiations of the Trans-Pacific Partnership (TPP) and put the U.S. in the forefront of efforts to eradicate extreme poverty in the next two decades and conquer AIDS. These will be welcomed by our friends. As for our vital neighbors – Mexico and Canada — for Colombians in the middle of a quest to end to decades of a bitter conflict, for Central America torn apart by the violence of drug traffickers, or for Cuban’s languishing under more than 50 years of repression by the Castros, it was a matter of wait until next year.

— Ray Walser

President Obama: I Know Best on Cybersecurity

President Obama just announced that he has signed an executive order on cybersecurity. Based on drafts of the order, this will likely harm U.S. cybersecurity, not help it. Instead of acting alone, President Obama should be trying to work with both houses of Congress to come up with solutions that are as dynamic as the Internet itself.

The President said his order is focused on “information sharing and [cybersecurity] standards” to make us more secure. While information sharing is critically important, the order cannot fully realize this goal; only legislation can make that happen.

And when Obama referred to “standards,” he means cybersecurity regulations. Regulations are the wrong approach to cybersecurity. Not only do they impose additional costs on businesses, regulations are just too slow to keep up with the nature of the cyber threat. As technology continues to change, new threats and vulnerabilities will emerge, but regulations will always be stuck years in the past.

Congress couldn’t agree on a path forward; neither chamber should accept the President’s regulatory strategy. President Obama should work with Congress, not go around them.

— David Inserra

National Education Standards: Greater Federal Control of the Classroom

“We need to give every American student opportunities like this. Four years ago, we started Race to the Top – a competition that convinced almost every state to develop smarter curricula and higher standards.”

The president portrays his administration as the champion of consumers, defender of the weak (aka the “middle class”) against the forces of greed. And it is true that there has been an extraordinary expansion of consumer “protections” in the past four years, largely the result of the Dodd-Frank financial statute. But beyond the rhetoric, the reality tells a different story: The excessive crackdown on financial products and services means fewer consumer choices and higher costs.

At the center of this “consumer” campaign is the Consumer Financial Protection Bureau. After just 18 months—and with a staff exceeding 1,000 and funding of $600 million—the bureau is restructuring the mortgage market; devising restrictions on credit bureaus, education loans, overdraft policies, payday lenders, credit card plans and prepaid cards; and amassing unverified complaints with which to assail creditors and bankers.

Consumer protection against fraud and other misdeeds is certainly necessary, but the bureau is on a regulatory tear that extends well beyond what is reasonable. The current structure of the CFPB, its lack of accountability and absence of oversight, invites regulatory excess. Along with its unparalleled powers and approach to regulation and enforcement, the bureau’s actions are chilling the availability of financial products and services, while its paternalistic view of consumers also means fewer choices and higher costs for credit. This is leaving families and entrepreneurs without customized options with which to invest and build wealth.

— Diane Katz

Afghanistan

Thanks to a steady drip of media leaks, President Obama’s announcement that 34,000 U.S. troops will be removed from Afghanistan came as no surprise. Regrettably, but not unsurprisingly, the President’s remarks about Afghanistan tonight were more about how America will leave Afghanistan instead of how we will achieve our objectives there.

The fact that President Obama actually mentioned Afghanistan was a huge improvement on his recent inauguration speech, when the word “Afghanistan” was not mentioned once— even though 68,000 U.S. troops are fighting there.

Perhaps the most ridiculous foreign policy statement of the evening was when President Obama said: “And by the end of next year, our war in Afghanistan will be over.” This is naivete on a dangerous level. A war doesn’t simply end just because you say it has. It is not just up to President Obama to decide when the war in Afghanistan ends. The Taliban has a say; the Pakistanis have a say; the Afghans have a say; and al-Qaeda has a say. If Afghanistan is about national security, like we have been told and like most believe, then the only responsible act is to ensure that U.S. objectives are met before any hasty troop reductions. After all, the whole point of a war is to achieve your objectives—not to leave it as soon as possible.

Any decisions taken to reduce troops numbers should be based on improved conditions on the ground and on military advice—not on a desire to end a war that, in some capacity, and regardless of what Obama thinks, will still have to be fought after 2015.

— Luke Coffey

President Obama’s Dangerous Debt Delusions

Does American have a federal debt problem? President Obama doesn’t think so, and that’s a dangerous and wrongheaded conclusion to draw.

Consider some simple facts. Federal debt held by the public was just over $6 trillion when Obama first took office in 2009, but nearly doubled to $12 trillion by the end of his first term (and exceeded $16 trillion if one adds funds held in various government trust funds). Under current policies, debt held by the public is projected by the Congressional Budget Office (CBO) to increase by another $8 trillion over the next 10 years.

How, then, can the President claim the debt monster is tamed? Selective use of data. Under CBO’s projections, the deficit is projected to decline from the trillion-dollar mountains of recent years to below $500 billion by 2016, the President’s last year in office. This leaves the impression Obama’s successor should have an easy time of getting the budget to balance. Not so.

As CBO’s projections show, after 2016, the deficit begins to rise rapidly once again under the full weight of soaring Social Security and Medicare spending. By 2023, CBO projects the deficit will have once again scaled the trillion-dollar heights. And if the projections were extended further, the resulting picture would worsen fast.

King Louis XV of France is credited with the famous expression, “Apres moi, le deluge” – after me, the deluge, meaning that after his death Louis expected a political collapse of some sort, and indeed, 15 years after his death the French Revolution began. When Obama says the government’s debt is essentially under control, his true message is, “after me, it’s your problem.”

— J.D. Foster

An American Recessional

Foreign policy usually takes a bad second place in most State of the Union addresses. In his speech tonight, President Obama certainly lived up to that precedent. But what was striking about his remarks was how strongly his foreign policy vision contrasted with his domestic policy prescriptions. At home, it seems that very little does not qualify as an “investment”: by his way of thinking, the government exists to start programs, spend money, tax the rich, and do things.

But abroad, the government exists mostly to stop doing things. One of the President’s biggest lines was the promise of bringing the troops home from Afghanistan and ending the war, under the mistaken belief that al-Qaeda has been defeated. He reiterated his stale promise to rely on diplomacy to prevent Iran from acquiring a nuclear weapon, an approach that has been tested to exhaustion by successive administrations and is nothing more than a program of kicking the can down the road. His approach to nuclear weapons was, predictably, to argue for doing less, and—in the face of the North Korean and Iranian evidence—to imply that cuts in the U.S. nuclear stockpile will induce others to behave better. And in the President’s telling, cyber attacks on the U.S. appear to stem from nowhere in particular; naming China, among others, might not be tactful, but it would have had the virtue of pointing out that this is not an abstract threat.

This administration has all but ignored the bipartisan commitment to freer trade that has been central to U.S. grand strategy since 1945, so while the President’s mention of the Trans-Pacific Partnership was welcome, it also comes after four years of no dynamism on the trade front. And while the EU will be jumping with joy at the President’s mention of trans-Atlantic trade talks, the reality there is likely to prove disappointing as well: As long as the EU and the U.S. stick to their money-wasting subsidy policy on agriculture, progress is likely to be slow and gains small. The overwhelming impression left by the address was of a foreign policy in recessional, and one that relies on rhetoric and the promise of future negotiations to create the impression of action and achievement.

— Ted Bromund

What Is Our “North Star”?

In his second inaugural, President Obama laid out a radical agenda to drive America further to the left and farther away from its principles and its framework of prosperity and limited government. It was a grand statement about continuing to change America, if there was ever any doubt about his intentions. “We, the people, declare today that the most evident of truths — that all of us are created equal — is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall.” It’s all about change, evolving concepts, and a state-centered community to achieve progress.

But in the State of the Union, in an odd formulation, it turns out that “a growing economy that creates good, middle-class jobs – that must be the North Star that guides our efforts.” Really? So the fundamental rights of our Declaration of Independence are evolving and changing to the extent that progress now demands same-sex marriage, yet we are to believe that the North Star that guides his economic policy is growth that creates middle-class jobs? This State of the Union might seem moderate in places—note the use of language, even conservative language—but the particular policies stemming from his inaugural are all there. President Obama is making a very serious claim to change the direction of the country, and become the dominant, if not realigning, figure in American politics. Conservatives must not allow progressives to claim the ground of our principles, opportunity and self-government.

— Matthew Spalding

The Experience of Voting in America

President Obama talked about voting rights tonight, claiming we are “betraying our ideals” when any American has to “wait for five, six, seven hours just to cast their ballot.” He announced a “nonpartisan commission to improve the voting experience in America.” His view of “nonpartisan” is putting two attorneys, one from his campaign and another from Governor Romney’s campaign, in charge of the effort. While there may have been some Americans who waited for long periods to vote in 2012, the vast majority did not. A recent study of the 2012 election reported that the average wait time nationally was only 14 minutes.

We already had such an election reform commission back in 2005, the Baker-Carter Commission, whose findings were largely ignored. It is especially hard to have confidence in any commission Obama might appoint given that his attorney general has tried to stop state election reform efforts like voter ID intended to improve the security and integrity of the election process. Moreover, Obama’s commission may just be a stalking horse to implement liberals’ latest partisan fantasies of automatic and election day voter registration, so-called reforms that will stifle real improvements and endanger the integrity of our elections.

— Hans von Spakovsky

The Fed Rebuts Obama’s Protests on the Economy

President Obama would have the nation believe his economic policies are working. He states, “Together, we have cleared away the rubble of crisis, and can say with renewed confidence that the state of our union is stronger.” This would only be true if his policies were intended to slow the recovery and preserve high unemployment.

Without question, President Obama inherited an economy participating fully in the Great Global Recession. Likewise, without question, the U.S. economy would recover eventually with or without Washington’s help. Indeed, a sharp recession, even if coincident with a financial crisis, generally produces a sharp recovery. Errors are recognized and corrected, business and families adapt, prices adjust as needed, and essential economic forces take control to create jobs and restore prosperity.

The economy is now in its fourth full year of recovery from the Great Global Recession, yet growth remains consistently slow, too slow to reduce the ranks of the unemployed significantly. To spur the recovery, President Obama’s economic policies centered on a massive expansion of government spending and debt. It failed, as failure was inevitable.

Accompanying this failure was a procession of policies, all of which slowed the economy further. Early in his administration, Obama advocated a massive, Rube Goldberg-esque cap-and-trade scheme for carbon emissions that would have wrapped the economy in a ball of crippling regulations, bureaucracy, and distortions. Fortunately, though the House of Representatives under then-Speaker Nancy Pelosi (D-CA) enacted a bill, the Senate killed it. But damage was already done in the signals this exercise sent businesses planning for the future. That signal? Watch out!

Then came Obamacare and the ineffectual financial regulatory morass known as Dodd-Frank, and then a torrent of threatened and proposed regulations on environmental issues. Washington red tape was rising, and the hopes of America’s businesses and families were drowning in it.

Four years after recession’s end, the economy continues to plod along. Against the President’s soothing rhetoric of prosperity, just around the corner stands a threatening indictment from a knowledgeable and politically independent source – the Federal Reserve. The Fed has embarked on a dangerous course of sustained quantitative easing. Why? Not because Obama’s economic policies have worked, but because they have failed, and the Fed now hopes to compensate for this failure so longsuffering unemployed workers may themselves have reason to hope.

Be clear: The Federal Reserve is engaging policies that pose grave dangers for the economy in the years ahead, yet the Fed believes the risks must be run for the sake of the propping up a weak economy today – to overcome in part the failings of Obama’s policies.

— J.D. Foster

Where’s Nuclear Energy, Mr. President?

For all the talk about clean energy and economic growth, it seems rather odd that the President neglected to mention the one technology that could help him achieve his environmental and economic objectives: nuclear power. Unlike his big-government, big-spending programs to use taxpayer money to spend on expensive energy projects that the private sector wouldn’t touch, nuclear energy could take off with just a few simple policy changes.

Fix nuclear waste management. President Obama’s policy to terminate the Yucca Mountain nuclear waste repository has set the prospects of a broad expansion of nuclear energy back. Reversing this policy is critical and that starts with directing the Nuclear Regulatory Commission to restart its review of the permit to build Yucca.

Fix nuclear regulation. The United States Nuclear Regulatory Commission does a good job of regulating public health and safety for a slow to no growth industry but take the wrong approach for regulating a technological diverse and growing industry. The NRC must be reformed to allow for more efficient regulation of existing technology as well as to promote the introduction of new technologies.

Get the government out of the nuclear energy business. The federal government has too much power over what nuclear technologies move forward. Instead of spending money at the Department of Energy to develop technologies that should be funded by the private sector, the federal government should focus on updating the NRC’s ability to regulate a modern, 21st century industry.

Open markets for U.S. suppliers. Countries around the world are seeking to expand nuclear power and the United States has much to gain by working with them. There is economic benefit. Every $1 billion in U.S. commercial nuclear exports result is between 5,000 and 10,000 jobs. But more importantly, the best way to ensure that high standards for safety security and nonproliferation are met is for the United States to be involved in foreign nuclear programs.

— Jack Spencer

Al-Qaeda Not Simply a “Shadow” But a Realistic Threat

During his State of the Union Address, President Obama stated that al-Qaeda, “the organization that attacked us is a shadow of its former self.” But he also emphasized that “the threat” that al-Qaeda’s affiliates and other extremist “groups pose is evolving.”

Following the death of Osama bin Laden in May 2010, the Obama administration had peddled the same the false narrative that al-Qaeda has been decimated. Yet, since the emergence of the Arab Spring, al-Qaeda affiliates have expanded their influence throughout North Africa and the Middle East.

In the past year, the U.S. Special Mission in Benghazi was attacked by an al-Qaeda affiliate, resulting in the death four Americans. The occupation of northern Mali by a coalition of terrorist groups has resulted in an emerging insurgency, and the terrorist attack on the In Amenas gas facility in western Algeria killed three Americans. The opposition movement in Syria is being hijacked by extremist elements hostile to U.S. interests.

Mr. President, al-Qaeda is strong; what’s missing is a U.S. counterterrorism strategy to counter it.

— Morgan Lorraine Roach

Oil and Gas Revenues Shouldn’t Fund More Clean Energy Subsidies

President Obama noted that other countries have dominated the clean energy race, but America’s race to usher in a clean energy economy has been a loss from the start. We’ve witnessed how lousy the Department of Energy acts as an investor. 19 taxpayer-funded companies are now bankrupt. But even if a subsidized company is successful, it’s a mistake to attribute that company’s success to the subsidy. It means that taxpayer dollars were used to offset private-sector investment that would’ve been made anyway. So whether a company is successful or not, energy subsidies are bad policy.

Now other runners of the race are bowing out. Germany, Spain, Britain and India are just a handful of countries that are recognizing the ineffectiveness of renewable energy “investments.” President Obama tonight called for federal revenues from oil and gas production to fund an Energy Security Trust to invest in alternative energy sources and technologies. Oil and gas production on federal lands can create jobs, lower energy prices and reduce the federal deficit, all without raising taxes. Those revenues should not be directed to continue down the misguided path of subsidizing green projects and technologies. We need to remove subsidies for all energy sources and technologies to return our energy economy to a more market-oriented one.

— Nicolas Loris

“Comprehensive” Immigration Reform

Well, we certainly saw this coming. Another call for comprehensive immigration reform. We learned in his Inaugural that our journey is not complete until “we find a better way to welcome the striving, hopeful immigrants who still see America as a land of opportunity.” Who can disagree with that? The time has come, he said. And we all know what needs to be done. Really?

We have long advocated and done extensive research on various policies that will reform immigration, but comprehensive reform is not the way to proceed: It won’t fix the root problems and will likely make matters worse. It doesn’t create opportunity, but restricts it. The better way to proceed is to go about solving problems, starting where there is broad agreement, and working toward a fundamental restructuring of our immigration system to emphasize work, opportunity, and assimilation under the rule of law. There is no reason to assume—and many reasons to doubt—that a “comprehensive approach” is the only reasonable and only fair way to proceed to reform. As we have stated recently, “The Heritage Foundation believes that America’s immigration system must be reformed through an open and public step-by-step, problem-solving approach that unites Americans and creates a system that welcomes immigrants, protects our sovereignty, encourages assimilation, and expands opportunities for everyone. Once such common-sense reforms are in place and working, lawmakers can determine how to respond in a fair, compassionate, and constitutional way to those who have come to our country illegally.”

— Matthew Spalding

Natural Gas: When Markets Work

President Obama highlighted that energy production has been one of the bright spots in this economic downturn, largely due to innovation and the unleashing of free enterprise. The expansion of oil and gas production on private lands as a result of horizontal drilling and hydraulic fracturing (fracking) has created undeniable and remarkable economic growth. In total, shale energy development has created 1.75 million jobs over the past few years alone, and is expected to account for 2.5 million jobs in 2015 and 3.5 million jobs in 2035. And this benefits every state, even the ones without the energy underneath the soil, through supplier networks and trade flows related to oil and gas activity. Even a state like Rhode Island had 2,200 new jobs in 2012 supporting unconventional oil and gas production.

This success emerged organically from the private marketplace, not from any specific government policy to promote these technologies and processes. The economic benefits as a result of directional drilling and fracking are even more impressive when one observes the impeccable environmental record because of an effective state regulatory regime. To his credit, the President stayed out of the way and allowed the marketplace to work, although regulations proposed by the Obama Administration could change that. We don’t need onerous and duplicative regulations that negate opportunities for the safe development of affordable, reliable energy.

— Nicolas Loris

Obama on Oil: When a Spade isn’t a Spade

The president’s rhetoric on oil and natural gas, that his “Administration will keep cutting red tape and speeding up new oil and gas permits,” would be great if it were true. While it’s true and a positive development that oil and gas production is up in America, it’s occurring on state and private lands. The energy production on federal lands has been held up by an anemic permitting process or, in many cases, is completely off limits.

It’s certainly encouraging to see the administration move forward with a new lease sale in the Central Gulf of Mexico, but the obstruction of oil and gas production is occurring all over the map. The administration has obstructed access billions of barrels in ANWR, off our Atlantic, Pacific and Gulf coasts, and on federal lands out West. They’ve driven us backward on the development of 982 billion barrels of oil shale in the Green River Formation in Colorado, Utah, and Wyoming. And in what’s probably been the most politically blatant move, President Obama is obstructing the construction of the Keystone XL pipeline that will bring up to 830,000 barrels of oil per day from Canada to the Gulf Coast refineries. Here’s a truly shovel-ready project that has bipartisan support and despite the Department of State’s conclusion that the project would pose no significant environmental risk, we’re still without a pipeline. And there was not one mention of Keystone in the president’s speech tonight.

It’s not just the energy sitting on the shelf, it’s jobs and economic opportunity.

Much to the chagrin of many of his allies, President Obama failed to mention “climate” once in his last State of the Union speech. And much to the chagrin of American consumers, this administration is enacting and pursuing regulations that will significantly drive up the cost of energy. President Obama wants to respond to the threat of climate change and tonight urged Congress to reconsider failed cap-and-trade approaches. Knowing that outcome is unlikely, he promised to skin the cat other ways by urging his Cabinet to take action with administrative regulations. The Environmental Protection Agency will likely propose greenhouse gas regulations for existing coal-fired power plants, and the EPA is set to finalize carbon regulations on new power plants that will make it all but impossible to build a new coal-fired plant.

Unilaterally reducing greenhouse gases would not make a dent in global emissions and, consequently, would do next to nothing to reduce global temperatures. Despite the negligible impact, the administration’s regulations are causing premature closing of existing coal-fired power plants and preventing the ability to build new ones. The consulting group ICF International estimates that 20 percent of America’s coal power plants could be retired as soon as 2020 because of the EPA’s air, waste, and water regulations. His proposal for carbon regulations on existing plants only makes it works. On the campaign trail in 2008, candidate Obama promised necessarily skyrocketing electricity costs. Unless Congress steps up and reverses this regulatory assault on energy, here we come.

— Nicolas Loris

“Energy Efficiency”

Conservatives aren’t against energy efficiency. They are against the central planning and government programs and mandates to make these cost decisions for people. People know how to make good decisions about their energy bills – they don’t need government to help them, nor is it a proper role of government. Individuals should make the judgment call of cost, not government. How is it that Americans, paying utility bills every month, wouldn’t know when they’re paying too much or when it would be smart to pay a bit extra to use a bit less energy?

Prosperity yields real energy efficiency. There is nothing wrong with efficiency motivated by personal profit. Government has never been good at either – profit or efficiency. Top-down energy efficiency plugs amount to nothing more than verbal counterfeit: politicians get something (voter approval, moral high ground, improved media image) for nothing (no real environmental benefit, though the perception of such is there).

How’s this for efficiency – eliminating federal auto and appliance efficiency mandates and preventing new federal programs to fund them.

— Katie Tubb

Infrastructure “Investments” Don’t Deliver On Promises

President Obama is right to point out that the country’s infrastructure—its ports and waterways, roads, and bridges, are aging and in many cases “badly in need of repair.” Extensive, healthy infrastructure is crucial for commerce and to keep the country economically competitive. His “Fix-It-First” program solution, however, doubles down on failed policies of the past—federal stimulus with no way to pay for it.

He made another bold push for infrastructure investments (read: spending) to achieve his vision of a “smarter government.” Bold—in the irresponsible sense—because such federal stimulus failed to jumpstart the economy following the 2009 stimulus package, and it will fail in future iterations. Local economies may see job creation, but any economic jolt on the aggregate will not materialize.

When the government engages in such spending, not only does it remove valuable resources from the private sector, but it allocates those resources less efficiently than the private sector does. Take high-speed rail, for example. It is one of the most expensive forms of transportation, and an inefficient way to increase mobility and reduce traffic congestion. Even though states or the private sector may share in the financing, taxpayers are exposed to tremendous risk. The private sector will not join in backing financially unviable projects, a reality from which the government could take a cue. Amazingly, the President insists on revisiting this financing mechanism with his new “Partnership to Rebuild America” initiative.

Luckily for taxpayers, the President at least acknowledges they shouldn’t “shoulder the whole burden” for these infrastructure investments, but they can bet on shouldering some of it. The recent past recalls other infamous examples, such as the slew of failed green energy companies, in which the government chose winners and losers. Taxpayers got the raw end of the deal then; they’ll suffer the same consequences if we repeat history.

Obama also said these proposals wouldn’t add a dime to the federal deficit, but he was tight-lipped on the specifics. If history is any guide, he will call for even more tax increases, which hurt investment and job creation. That’s certainly nothing to cheer for.

— Emily Goff

Supporting Marriage to Fight Poverty

Tonight, President Obama said that he wants to “work to strengthen families by removing the financial deterrents to marriage for low-income couples.”

While it’s not quite clear what Obama meant by this, it is clear that marriage is an important factor in promoting social welfare and upward mobility.

To promote economic security and well-being for all Americans, marriage must be restored. Not only are strong marriages and families necessary for a thriving economy, but they give children the resources to achieve the brightest future.

— Rachel Sheffield

Absence of Corporate Tax Reform a Disappointment

President Obama promised to pivot to job creation tonight. But he mentioned not one word about a policy that would create jobs and that has bipartisan support: Corporate tax reform.

There is bipartisan agreement that the rate needs to come down to at least match the worldwide average. There is so much agreement, in fact, that breaking with his usual absence when it comes policy proposals, the President has released his own corporate tax plan that lowers the corporate tax rate. It is disappointing he failed to mention his plan.

The plan is irretrievably flawed. But it does lower the rate, which shows that even an aggressive tax hiker like the President accepts the reality that the rate needs to come down.

Corporate tax reform is one area where Congress could achieve important policy gains this year. The President should lead them on this key issue.

— Curtis Dubay

No New Housing Policies

One of the more disappointing parts of the speech was the failure to address the future of housing finance giants Fannie Mae and Freddie Mac. Despite that fact that the two played a role in creating the financial crisis and his administration promised to have a plan to deal with them two years ago, the President remains silent. Until Fannie Mae and Freddie Mac are replaced with a private housing finance system, a real housing recovery will be elusive.

Instead, the President recycled failed housing finance policies that have a consistent record of not doing anything close to what is promised. Now that recovery is beginning, there is even less reason to commit federal dollars for the seventh or ninth version of this policy disappointment. Instead, a modern, more efficient housing finance system would spur additional housing growth and better enable families who owe more on the mortgages than they houses are currently worth will be able to see the value of their homes continue to rise.

— David C. John

Obamacare and Health Care Spending

No, Obamacare is not helping to slow health spending. The law adds over $1.6 trillion in new spending over the next ten years and is a major contributor to our nation’s runaway entitlement spending. As Heritage has stressed before, spending on health care entitlements will be greater than all other spending—including Social Security and defense spending by 2015. The first step to getting our nation’s spending under control is stopping Obamacare before it starts. As Heritage’s Nina Owcharenko writes, “Politically, restraining these future obligations should be easy. There are no current beneficiaries, hence ending it would affect no one.”

— Alyene Senger

What’s the True Engine of America?

“Reignite the true engine of America…the idea that if you work hard you can get ahead.” Somewhere in between those two ideas, President Obama and Congress have been sidetracked with federal subsidies to certain industries (like the extension of wind and biofuel tax credits), mandates for energy efficiency (CAFE standards), and punishing politically rejected energy sources (conventional fuels which run the nation – coal foremost among them). To reignite the true engine of America in the energy sector, the President and Congress need to step out of the way to let states and individuals expand the market, pursue America’s resources, and tackle problems.

— Katie Tubb

Medicare Reform

Yes, Medicare spending must be reined in. But the failed price control policies embedded in Obamacare and promoted by the President tonight are not the way to do it. Obamacare’s over $700 billion in cuts to Medicare are already taking a toll on Medicare providers. As Heritage has said before, “This is flawed and counter-productive policy…There’s a better way: harnessing the forces of competition. That will require serious structural reforms—as outlined in The Heritage Foundation’s Saving the American Dream—not just tightening price controls that put Medicare providers out of business.”

There are plenty of bipartisan first steps to Medicare reform that lead to the structural reform Medicare needs. And as Heritage has explained before, “Of all Medicare changes advanced over the past three decades, only premium support—a variant of defined-contribution financing—has inspired bipartisan leadership for comprehensive structural reform.

— Alyene Senger

State of the Climate 2013

Swept into office four years ago based, in part, on promises to slow sea-level rise, President Obama initiated a radical climate agenda. It seems we are seeing a rerun in 2013. It is worth asking what is different four years after his first State of the Union Address?

There have been four more years of no global warming. In 2010, there had been no significant world temperature increase for over a decade. The streak is now 16 years long.

The scientific basis for catastrophic climate change gets weaker and weaker. The economic argument for green subsidies has already collapsed. It is time for the administration to quit using both arguments to justify a regulatory and fiscal power grab.

— David W. Kreutzer, Ph.D.

The Real Financial Problem: Regulation

President Obama is promising once again to grow the economy—largely through government spending. What he fails to mention are the regulatory policies that are inhibiting investment and job creation. Specifically, the hundreds of Dodd-Frank financial regulations are constricting access to capital and credit and raising the costs of banking services for consumers. With only a third of the regulations actually finalized, the likelihood is high that conditions will worsen.

Most agencies are months behind in the rulemaking schedule. The lag is a direct consequence of the law’s complexity and the conceit of Congress that government should actually manage the entire financial sector. But if regulatory agencies are finding the rulemaking too onerous to manage, the burden of compliance on the financial services industry will be exponentially worse.

This colossal regulatory edifice teeters on the faulty premise that the 2008 economic crisis was a consequence of too little regulation—as opposed to misguided housing policies and twisted tax and regulatory incentives. Placing onerous burdens on financial institutions and their customers will increase risks to the financial system and further stall the meager economic growth this administration chronically overstates.

— Diane Katz

“Balance” in Obamaspeak

Tonight’s State of the Union address reflected President Obama’s liberal ideology: Everything starts with government. His proposals for new “investments” in manufacturing, infrastructure, and so on rest on the false belief that only government can figure out how to make the economy grow. Hence his “Fix-it-First” program, and his Partnership to Rebuild America. If government doesn’t do it, it won’t happen.

When he claims his new spending proposals won’t add to the deficit, it proves he just doesn’t get it. The deficit is a symptom of excess spending; it’s spending that has to be controlled.

Though he won’t submit his budget until next month—the fourth time in five years his budget will be late—his State of the Union address rippled with proposals for more government “investments” –additional funds for manufacturing, schools, clean energy, and so on. In other words, more of the Keynesian economic “stimulus” measures that have failed to stimulate much of anything except more debt.

Yet, as he announced last week, he also wants to delay the across-the-board spending cuts (“sequestration”) slated to start March 1, but wants Congress to figure out how to do it. He insists, once again, on his own creative definition of a “balanced” approach—meaning it must include more taxes.

The government’s fiscal outlook is nearing critical. Just last week, the Congressional Budget Office (CBO) warned the government’s debt held by the public will remain at around three-fourths the size of the economy or above throughout the coming decade. These are the highest levels of publicly held debt in 60 years, but unlike those of World War II, they result from permanent spending programs, and will worsen over the longer term. Moreover, the projection is based on optimistic assumptions; even this troubling outlook could worsen. If Congress and the President spend more than CBO projects (by suspending the sequester, for example), publicly held debt could reach nearly 90 percent of gross domestic product, stifling economic growth.

With the government drowning in red ink, Obama offers a life preserver made of lead: more spending. He has already pocketed a $618 billion tax increase in the fiscal cliff deal (in addition to $1 trillion in new Obamacare taxes). He needs to accept that true “balance” has two sides—and start cutting spending.

— Patrick Louis Knudsen

Global Warming Is Not a Matter of National Security

Though somemodels show catastrophic warming, the data do not. What the data do show is that temperatures have leveled out over the past 15 years, such that Britain’s Met Office has dramatically lowered temperature projections. There has been no discernible trend correlating carbon dioxide with tropical storm activity over the past 200 years. And America is experiencing a hurricane drought of sorts where for seven years there has not been a hurricane greater than Category 3 to make landfall since Wilma in 2005, the longest such stretch in the past century.

— Katie Tubb

High U.S. Debt Will Depress Jobs for Workers

President Obama’s stated goal of encouraging job creation in a weak economy comes as no surprise. The challenge is that the President has the policies all wrong. The President’s statement, “we need […] a smarter government that sets priorities and invests in broad-based growth”suggests the President believes we can spend our way to prosperity at a time of massive budget deficits.

But increasing government spending and debt are in fact crowding out private investment. Less private investment means entrepreneurs have fewer resources available to create private jobs. Those would be the kinds of jobs that actually grow the economy and increase prosperity for Americans. Instead, the President is hung up on the failed idea of government spending to stimulate job creation—no matter how many times history shows this costly experiment to fail.

One needs to look no further than to our trading partner Japan to observe harmful deficit spending to desperately stimulate growth while the economy stagnates instead. This misguided policy is standing in the way of a Japanese recovery. As The Heritage Foundation’s Derek Scissors and J. D. Foster explain:

Japan’s debt is almost entirely domestically financed, which means gigantic sums are shifted from the private sector to the public sector, where the social return on investment is almost nil and the yields paid on the debt are only slightly better. The huge debt and oversized government has sapped Japan’s domestic sources of growth.

One of the major impediments to economic growth and job creation in the not so distant future in America will be the drag from high U.S. publicly held debt levels approximating the size of the entire U.S. economy. The President and Congress should take firm and immediate steps to balance the budget within 10 years, by cutting spending and reforming the entitlements. Creating that certainty over U.S. fiscal policy would spur private investment and job creation.

— Romina Boccia

Sequestration Is a White House Creation

The President has executed the greatest act of political jujitsu in the modern age. His people convinced congressional leaders to put sequestration into the Budget Control Act, and then denied it when it looked unpopular. When it appeared that the potential effects of sequestration would rile voters before the election (WARN Act layoff notices two days before the vote), the Department of Commerce and the OMB told contractors to go ahead and ignore the law, no sweat. The Joint Chiefs of Staff also said no worries on readiness.

Now, the President is smugly looking at conservatives and saying, “If only you guys were not so ideological, you’d let me raise taxes (again), and save Defense!” It does not seem to matter that only conservatives have offered solutions, only conservatives see the massive spending on entitlements as the problem (as do all reputable economists), and that suddenly all the Chiefs have finally started admitting what a disaster sequestration will be for our national readiness.

What will happen? The President feels he will get either the huge defense cuts for which he has insufficient votes, or new, enormous tax increases, for which he also cannot get through Congress the normal way. The kicker is that it seems he will get to “blame” conservatives for whatever happens. The sad truth is the ones who will “pay” for this are the young troops who get sent to the next conflict situation ill-prepared. The President’s only solution is to raise taxes. This will cause more damage than it would help.

— Steve Bucci

Expanding Federal Preschool Subsidies Is Bad Policy

President Obama’s call to expand government preschool and child care is bad policy. The Department of Health and Human Services already funnels significant sums of taxpayer dollars into federal child care programs. HHS oversees the highly ineffective Head Start program, which costs taxpayers over $7 billion annually. Moreover, funding for child care for low-income families is provided through the Child Care and Development Fund (CCDF) and through Temporary Assistance to Needy Families (TANF) programs, to the tune of $10 billion per year.

In all, taxpayers spend an estimated $25 billion on some 45 federal day care and preschool programs annually. The Government Accountability Office (GAO) reported last year that these numerous programs are housed within the Departments of Education, Health and Human Services, Agriculture, Labor, Housing and Urban Development, and others.

What’s more, preschool has little long-term impact on children’s academic outcomes. A robust body of literature warns that “fade-out” of academic gains is a common problem. Economic research suggests that “the effects of prekindergarten on skills largely dissipate by the spring of first grade, although the behavioral effects do not.” Translation: academic gains derived from preschool disappear by the end of first grade, but the negative effects of preschool on children’s behavior remain.

The majority of America’s young children already attend preschool, and new federal spending to expand day care and preschool would be an expensive and unnecessary taxpayer subsidy for middle-class families. “Free” preschools and child care will also further crowd out private programs, limiting options for parents.

Demand for new, large-scale government spending on early childhood education and care is not evident. Families seem to prefer caring for their children at home in their early years. Strong majorities of mothers indicate that they prefer to stay home when their children are young, with 80 percent of mothers who work part-time indicating that is the ideal scenario for them.

Instead of increasing federal spending on preschool and day care, the administration should be working to trim duplicative and ineffective programs, and leaving the provision of early childhood education and care to private providers, and most importantly, parents.

— Lindsey Burke

No More Tax Increases

President Obama once again called for tax increases to lower deficits and debt. He did so by proposing to close “loopholes.”

Closing loopholes when done in isolation without accompanying pro-growth changes to taxes runs contrary to his professed desire for tax reform. In fact, it is tax “deform.”

Tax reform is about economic growth, and that alone. Growth is encouraged by lowering rates and broadening the base so tax reform doesn’t raise taxes. President Obama always forgets those two vital parts of tax reform.

Tax increases are not needed to lower the deficit. There is plenty of revenue coming into Washington. The CBO released its updated outlook for the federal budget just last week. It showed that revenue will exceed its historical average by 2015 and remain above thereafter.

The President needs to focus on tax reform to encourage growth, not to raise revenue.

The Air Force is flying the oldest fleet in its history. The B-52 fleet just turned 60. F-15s have flown long enough to literally span generations. While opponents of a robust national defense argue that we don’t need new advanced F-35s to meet tomorrow’s threats, they can’t deny that pilots are flying worn-out planes today.

The Army has seen readiness shortfalls even during wartime. Army engineer Col. Kerry Kachejian recounted having to rent SUVs in Baghdad because his men could not get armored vehicles. They even had to drape their own body armor outside the trucks’ windows because they couldn’t afford armor kits to protect against gunfire. These service members deserve better.

President Obama was right today that taxpayers cannot continue to subsidize the soaring costs of college. The average college student leaves school more than $25,000 in debt, and total student loan debt in the United States now exceeds $1 trillion – exceeding credit card debt. Not only are they debt-burdened, too many students leave college without the skills needed to be successful in the workforce.As the Center for College Affordability and Productivity reports, “nearly half of recent college graduates are underemployed, holding jobs that require less than a four-year college degree.”

Increasing college subsidies – grants and subsidized loans – will not solve the college cost problem. These increases only allow universities to continue to increase tuition and fees, knowing Washington will increase subsidies to students.

A seductive idea, even among some critics of today’s accreditation system, is to have the federal government replace or supplement federally driven accreditation with a scorecard that seeks to measure the output of colleges by criteria such as graduation rates, employability of graduates, and value for money. Such federal intervention would be a mistake: Existing institutions that are comfortable within the cocoon of protectionist accreditation would lobby hard, and no doubt effectively, for output measures that define success in their own terms. Moreover, a competing range of such private outcomes-based scorecards already exists, sponsored by such bodies as U.S. News & World Report, Forbes, ACTA, and Kiplinger’s.

Federal policymakers should stop the higher education spending spree and begin thinking in terms of knowledge and skill acquisition, not seat time. Policymakers can move toward this goal by decoupling accreditation from federal financial aid subsidies – a reform that would provide independent entities the opportunity to credential courses and skills.

— Lindsey Burke

How High U.S. Debt Levels Hurt Americans and Slow Growth

The President said that “for more than a decade, wages and incomes have barely budged.” If spending and debt continue growing on their current trajectory, wages and salaries will be depressed because of the highest U.S. debt in a decade.

Rising government spending and huge deficits are threatening to ring in a period of depressed growth and fewer opportunities for Americans. Without sequester-level spending cuts, publicly held debt is projected to reach almost 90 percent of GDP in 10 years. Debt levels this high are associated with significantly slower growth for a prolonged period of time.

Academic research is increasingly confirming the dangers from allowing public debt to grow too large. Research by Reinhart, Reinhart, and Rogoff of 22 advanced economies over a period of 110 years concludes that public debt levels at 90 percent of GDP are associated with growth levels 1.2 percentage points lower (average economic growth of 3.5 percent would fall to 2.3 percent) and the drag lasts an average of 23 years. At the end of the period growth is lower by nearly a quarter.

The implications for the living standards of ordinary Americans are striking. High public debt levels threaten to raise interest rates, raise price inflation, and crowd out private investment. Interest rates on mortgages, car loans, and other loans could rise. Families may have to delay purchasing their first home and other means of building financial security. The dream of starting a business would no longer be in reach for some would-be entrepreneurs.

Inflation reduces the purchasing power of the cash savings of American families, eating away at the rainy day funds of especially the poor and middle class. High government spending and debt crowds out private investment which means fewer available jobs, lower wages and salaries, and fewer opportunities for career advancement.

The President and Congress should balance the budget in 10 years by making necessary and prudent reforms to entitlement programs and cutting inappropriate and often times wasteful federal spending.

— Romina Boccia

Debt Reduction Almost Complete? Really?

The President tonight repeated claims that he and Congress already have enacted $2.5 trillion in deficit reduction, and need only another $1.5 trillion to put the government on a sound fiscal footing. According to the President, “we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.” Even if the administration’s arithmetic is correct, the conclusion rests on hopeful assumptions about politicians’ behavior.

For one thing, it counts the spending caps in the Budget Control Act. While those caps indeed are in place, Congress must pass appropriations bills every year that stay under them. If lawmakers fail, they can simply raise those cap levels. Besides, Congress and Obama already have exploited various loopholes that allow spending much higher than the caps. The most recent example was $50 billion for Hurricane Sandy responses.

Second, only the House has made any attempt to address the gravest budgetary problem, entitlement spending. Unless the President and the Senate accept the need to adopt entitlement reform, that spending will continue running out of control.

Third, the President himself has asked Congress to suspend the across-the-board spending cuts (“sequestration”) scheduled to start March 1—and has proposed nothing to replace them. Although sequestration is a bad budgeting practice, it is the only spending reduction at hand.

Getting deficits and debt under control will require sustained efforts at controlling spending. Dismissing this need is just another example of the President’s cavalier attitude toward the budget.

— Patrick Louis Knudsen

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